Customer Experience Management (CEM): On the Path to the Perfect Customer Experience

1. What is Customer Experience Management (CEM)?
2. What exactly is CX Management about?
3. What are the tasks and goals of CEM?
4. What is the difference between CRM and CEM?
5. Tips from practice for successful CEM
6. Is there an all-in-one tool for Customer Experience Management?
7. Conclusion

Customer Experience Manager, CX Manager, Head of Customer Experience, CX Specialist ...

Experts such as these are increasingly sought after in the German-speaking world. This means: Customer Experience Management seems to be much more than a short-lived trend in the marketing universe. Because companies are willing to invest a lot of money in specialized personnel. But what exactly does CEM mean - and what's it all about? What goals do companies pursue with it? What is the difference between CEM and CRM? What practical tips help with successful implementation? And is there an all-in-one tool that meets all CEM requirements? You will find out all of this in the following article.

What is Customer Experience Management (CEM)?

When it came to companies and their customers, good customer relationships were the focus for a long time. But now, the individual and his personal experiences have moved to the foreground. The basic assumption behind this: If you can always inspire a customer anew, they will become a loyal fan who keeps coming back and gladly recommends the brand.

In other words: While the Customer Relationship Management (CRM) primarily deals with optimizing a company's internal processes, Customer Experience Management (CEM) takes an even more consistent approach to a customer-oriented approach. It links new technologies, strategies and processes with a fundamentally customer-centered attitude. Customer Experience Management involves the entire journey of the customer, starting from the first contact with the company to the buying decision, the customer service after the purchase and ongoing interaction. All communication channels and touchpoints are taken into account - regardless of whether they take place online or offline, include personal interaction or are carried out using AI and chatbots.

There is currently no universally valid definition of CEM. But to simplify it greatly, it can be understood as a comprehensive approach that aims to create positive customer experiences to increase customer satisfaction, customer loyalty and thus business success. CEM uses the strategic planning, design and optimization of all touchpoints and interactions of a customer with the company during the entire customer experience. The goal is always to provide consistent and outstanding experiences that not only meet but ideally exceed the needs and expectations of the customer.

What exactly is CX Management about?

If you compare the multitude of existing definitions with each other, it also becomes clear: A lot of Customer Experience Management revolves primarily around “soft” factors such as emotions, satisfaction, enthusiasm or loyalty. These aspects are undoubtedly of central importance. Because they have a direct influence on the customer's long-term and solid commitment to a company.

However, it is also important that CEM is not limited to these emotional aspects. A comprehensive customer experience also requires taking into account “hard” factors. These primarily include data, technologies, automation, data protection, change processes and cross-departmental cooperation. At this point, it is worth taking a closer look at these factors. Data plays a major role in CEM. Because they provide us with information about customer behavior, about the status in the customer lifecycle, about needs, preferences, dislikes and much more. In order to create personalized and tailor-made customer experiences in the first place, we must effectively collect, analyze and use this data.

Just as important: the technologies. Because they support CEM by enabling automations and facilitating interaction with customers across various channels. This enables more efficient processes to be provided, personalized offers to be made and the overall customer experience to be improved. Data protection is also an essential part of CEM. Because customers rightly expect their data to be treated securely and responsibly. To justify the trust in them, companies must ensure that they comply with applicable data protection regulations and communicate transparently with their customers. But CEM also requires a change process within the company. Because the consistent focus on the customer experience usually means a realignment of processes, structures and ultimately even the entire corporate culture.

The close cooperation between the relevant departments - such as marketing, sales, customer service and IT - plays an important role here. This cross-functional cooperation is a must in order to guarantee a consistent and seamless customer experience across all touchpoints. However, the foundation for the successful implementation of CEM strategies consists of data and technologies. Because without the correct collection, analysis and use of the necessary data - and without using suitable technologies - the CEM concept stands on shaky legs. Data provide insights into customer behavior and enable personalized customer experiences.

The technology ensures that the latter can be implemented efficiently, precisely and automatically. If something is wrong here on one side or the other, any CEM approach would quickly collapse under load. To ensure long-term success, it is therefore crucial to build customer experience management on a solid data and technology basis.

What are the tasks and goals of CEM?

The central idea of Customer Experience Management is to put the customer at the center. At first glance, this idea is anything but new. But customer centricity in the sense of CEM means really focusing on the needs and wishes of the customer in all corporate activities.

Steve Jobs recognized this over 25 years ago: "You’ve got to start with the customer experience and work backwards to the technology." This famous quote laid the foundation for Apple's long-standing, consistent focus on customers. The outstanding result of these efforts: Apple has been leading the ranking of the world's most valuable brand for many years. But what tasks arise from this comprehensive customer centricity for CEM?

Out of numerous CX customer projects over the past years, eight particularly important and recurring tasks can be distilled.

Source: Vision11 

1. Generate customer insights

By systematically recording, analyzing and interpreting customer data and customer feedback, valuable insights can be gained into customer needs, preferences and behavior patterns. These insights serve as a basis for specifically developing and optimizing products, services and marketing strategies. But many companies still seem to have difficulties effectively capturing, understanding and using customer data across the entire lifecycle. A Forrester Consulting survey at least suggests this. Because the answers of the CX executives seem astonishingly contradictory here:

Source: Vision11; according to: Forrester Consulting on behalf of Teradata and Celebrus: Customer Experience (CX) in leading companies. San Diego/Munich 2021.  

2. Optimize Customer Touchpoints

In order to ensure a seamlessly positive customer experience, all points of contact between the customer and the company should be analyzed, optimized and coordinated. This includes all online and offline channels, the sales process, customer service and other points of interaction.

3. Align organizations with a customer focus

A prerequisite for a consistently positive customer experience is to create a corporate culture where the needs and concerns of customers actually come first. On the one hand, this requires the establishment of clear processes, which aim at smooth customer interactions . To build long-term trust, it also involves designing open, transparent and personalized customer communication.

4. Create positive customer experiences

Positive customer experiences are all of a customer's experiences with a brand where they feel understood and picked up with their personal needs - from the first contact through smooth interaction with the company to the product experience and service.

The decisive prerequisite for this: We must know and understand our customers (see point 1, Customer Insights). On this basis, personalized content and interactions can then be created - for example with regard to purchase history, preferences, location etc. Personalization also includes playing out the content on the channels preferred by the customer and at the right time.

Especially in view of the many contact points of a customer with the most diverse company departments, it is clear how important it generally is to establish a customer-centered mindset throughout the company (see point 3).

5. Optimize processes from a customer perspective

When it comes to processes, many companies still think too much from the inside out. But customers don't care whether department A is responsible for step 1 and department B for step 2. A detailed analysis can identify corresponding obstacles and breaks. The subsequent optimization should be based on whether the processes now run smoothly from the customer's perspective and support positive customer experiences.

6. Promote value-based customer relationships

Numerous studies show: More and more people prefer brands that share their values ​​with them. (See for example ZHAW, Customer Management Study 2022). The focus is often on issues such as sustainability, environmental protection or social commitment. If a company succeeds in credibly conveying values ​​like these, this can lead to a strong emotional bond with the brand.

The prerequisite for this is authentic and transparent communication without “Green”- or “Colorwashing”. The latter is quickly exposed by the audience - and often leads to damaging reactions on social media.

7. Differentiate yourself from the competition

Many products and services tend to become more and more interchangeable. Positive brand experiences can therefore play a decisive role in order to differentiate yourself from the competition. Even more: Since Customer Experience Management is based on focusing on the customer and understanding them, differentiating products, product features and services can arise from these insights.

8. (Re)position the brand from a customer perspective

Of course, in “classic” positioning methods the view of the target groups also plays an essential role. But positioning is often still influenced by the we perspective. (“What do we offer to differentiate ourselves?”). CEM - and thus the focus on the customer and his experiences - can help to put existing positioning to the test and, if necessary, redefine it from a consistent customer perspective.

Legendary example: Dove's repositioning away from traditional beauty ideals towards the “true beauty” of its customers is considered one of the most successful brand relaunches in recent marketing history.

When it comes to establishing Customer Experience Management, depending on the industry, product segment, market or B2B or B2C alignment , other customer-specific tasks or goals may also arise. So consider these eight main tasks as basic guidelines - and supplement them as needed with additional customer-specific, market-specific or company-specific goals.

What is the difference between CRM and CEM?

CRM (Customer Relationship Management) and CEM (Customer Experience Management) are closely intertwined, but they represent different approaches in customer management. CRM focuses more on the internal perspective of the company (“inside-out”). Because it aims to get a holistic view of the customer across all departments and employees. The relationships and interactions with the customer are at the center. To manage customer relationships and develop sales or marketing strategies, CRM mainly uses master and movement data.

CEM, on the other hand, takes the external perspective of the customer (“outside-in”). Here, the entire business model is viewed from the customer's perspective - with the aim of creating outstanding customer experiences at all touchpoints along the Customer Journey. For this, CEM goes beyond the purely master and movement data and also tries to record and analyze subjective customer wishes, emotions, perceptions etc. These customer insights play a decisive role in continuously improving the customer experience.

Since effective customer relationship management and a positive customer experience go hand in hand, you should understand CRM and CEM as complementary approaches. Because a successful integration of both approaches enables companies to manage their customer relationships efficiently and at the same time promote customer-centered growth and differentiated customer experiences.

Tips from practice for successful CEM

The successful introduction of Customer Experience Management is strongly influenced by the individual situation of the respective company. Therefore, there can be no universally valid instructions for this. Based on my project experience, however, I would like to give you four tips. At first glance, they appear simple, but from a practical point of view, they are essential success criteria.

1. CEM as a holistic approach

Customer Experience Management is a holistic approach that is not solely the responsibility of management, the staff unit created for this purpose, or a single department. And CEM does not only affect a certain target group. Companies should rather view the customer experience as a whole and analyze all touchpoints along the customer journey. Every interaction point should be optimized to ensure a seamless and consistent customer experience. Only this comprehensive view enables successful implementation of CEM.

2. Customer insights as a basis

By continuously collecting data and using it, valuable insights can be gained into the needs and preferences of customers. This information serves as a basis for adapting strategies and measures specifically and ensuring a customer-centric orientation. In addition to data analysis, customer feedback and market research are also important tools for making customer-centered decisions.

3. Technology as a major lever

CRM systems, customer analytics, artificial intelligence and automation tools offer companies a decisive added value to improve the customer experience. Because these technologies help in collecting and analyzing customer data, in personalized customer solicitation, in automation of processes, in provision of tailor-made solutions for optimizing the customer experience, and much more. All of this would simply not be possible without innovative technology.

4. Measurability as an essential success factor

"Learn, build, measure, repeat": It is crucial for successful Customer Experience Management to continuously measure measures and optimize them on this basis. The first step is to define the KPIs that are relevant for your company and your goals. These key figures can, for example, evaluate the influence of your efforts in terms of customer satisfaction, recommendations or customer loyalty. Measuring the customer experience is a complex task. But there are established methods and procedures that you can fall back on here.

For the validation of the customer experience, it is advisable to develop a tailor-made approach that links various measurement methods and key figures. In practice, the following five approaches or KPIs are often used:

Source: Vision11; according to: Franz-Rudolf Esch, Daniel Kochann: Customer inspired by system. In 5 steps to Customer Experience Execution. Frankfurt a. M., Campus Verlag, 2019.

⁠Generally, always remember: The introduction of Customer Experience Management is not an isolated project or a larger program within the company. It's more about a comprehensive realignment and a business strategy that brings about a fundamental change in the entire organization.

CEM is a continuous process of optimization whose purpose is not only to increase monetary results in the short term. Rather, CEM aims to inspire customers again and again - and thus bind them to the company in the long term. And that in turn is the basis for sustainable business success.

Is there an all-in-one tool for Customer Experience Management?

Many of you are probably wondering whether there is an all-in-one tool for all the tasks in Customer Experience Management. If you posed this question to the leading CX solution providers like the answer would most likely be: “Yes”. However, my answer is clearly: “No”. Because as a complex and multi-layered approach, Customer Experience Management covers such different aspects as customer data management, customer experience optimization, feedback capture, analysis and much more.

While there are tools that cover some of the required functions - an all-in-one solution or a platform that covers all requirements unfortunately does not exist. In order to implement a comprehensive Customer Experience Management strategy, it is therefore advisable to evaluate the specific requirements of the company and on this basis identify suitable tools and platforms with which the defined goals can be implemented as best and economically feasible.

Salesforce Sales Cloud

SAP Sales Cloud

Microsoft Dynamics 365 Sales

Conclusion 

Customer Experience Management is often portrayed as the multifaceted and emotional world of positive customer experiences. But if you deal intensively with CEM, it quickly becomes clear that it is a comprehensive concept. It includes such different aspects as data management, process optimization, technology integration, strategic alignment, change management and overcoming traditional thinking and working methods in the entire organization.

CEM combines a fundamental understanding of customers' expectations and needs with the implementation of effective measures to create a consistent and impressing customer experience.

According to Stepstone, there are currently over 2,000 open positions with the profile "Customer Experience Manager*in" in the DACH region. This confirms that a large number of companies are intensively dealing with CEM - or intend to do so in the near future. This increasing demand for specialists illustrates that companies have recognized the importance of Customer Experience Management and are willing to invest in this strategic orientation. And it shows that Customer Experience Management is increasingly perceived as a differentiating factor in competition.